This week we look at one of most hidden of all domains affecting inequality — the role of macroeconomic policy. Don’t worry if you haven’t had a course in macro. We’ll be approaching the subject from an entirely different direction from standard courses, which rarely if ever explore distributional consequences.
The questions I’ll focus on are: What’s the effect of macroeconomic policy on inequality? What’s the difference between fiscal and monetary policies? How fast can the economy grow without igniting inflation? How should inflation be remedied? How and under what conditions does faster growth reduce inequality?
Click here for the Class 8 slides.
Looking for another session? Click the link for: Class 1, Class 2, Class 3, Class 4, Class 5, Class 6, Class 7, Class 9, Class 10, Class 11, Class 12, Class 13, Class 14.
This week’s readings —
Monetary Policy:
Fiscal Policy:
Having lived through the '70s and at one point owning a 19% home equity loan, the piece on Volker is one of the most eye-opening essays I have read. In particular the two things that really grab me is first his blindness to the human cost of his policies, and second that an Obama administration could turn to this man for guidance through an economic shock. The "shock doctor" himself! Thank you professor - a real addition to my scanty economics education.
It would be interesting to hear thoughts on the embedded growth imperative at the core of the monetary system and the implications of that on society, climate change, and the planet. Why do we think infinite growth is a good thing?